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Azerbaijan to Change Gas Prices for Turkey

Oil&Gas Materials 11 February 2008 19:35 (UTC +04:00)

Azerbaijan, Baku, 11 February / Trend / The Azerbaijan Gas Supply Company (supplies gas from the Shah Deniz field operated by Statoil) is negotiating with Turkey on its intention to change the price of Azerbaijani gas supplied to Turkey from the Shah Deniz field, the Azerbaijani Industry and Energy Minister Natig Aliyev said on 11 February.

The terms of reconsideration of the price are envisaged in the contract, the Minister said. Presently, the gas price comprises $120 per 1,000 sq m.

"The Azerbaijani gas should be sold at market price," the Minister said.

The contract on development of off-shore Shah Deniz field was signed on 4 June 1996. The parties to the contract are ВР (operator - 25.5%), Statoil (25.5%), SOCAR (10%), LukAgip (10%), NICO (10%), Total (10%), and TPAO (9%).

Gas production in the field was launched in December 2006. Presently, gas is transported to Georgia and Turkey via the South-Caucasus gas pipeline. Azerbaijan also purchases the gas.

Four wells with a daily debit of 22mln cu m of gas are operating in the field. The 5th well is currently being drilled.

The total reserves of the Shah Deniz field are assessed at 1.2trln cu m of gas. Some 8.8bln cu m of gas is envisaged to be produced within Stage I per year. The gas will be supplied to Azerbaijan, Georgia and Turkey. The production will be increased up to 20bln cu m within Stage II which will commence to be realized after 2012. At this Stage, the gas is implied to be exported to Europe.

The correspondent can be contacted at: [email protected]

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